Market Overview

Goldman Sachs Trades Higher After Q4 Beat

Goldman Sachs Trades Higher After Q4 Beat

Shares of Goldman Sachs Group Inc (NYSE: GS) gained 3 percent early Wednesday morning in reaction to the company's better-than-expected fourth-quarter earnings report.

What Happened

Goldman Sachs said it earned $6.04 per share in the fourth quarter on revenue of $8.08 billion versus expectations of $5.61 per share on revenue of $7.78 billion. The adjusted earnings print came in at 4.83 per share, ahead of Bloomberg's $5.53 estimate.

Net earnings for the quarter improved from a loss of $1.928 billion in the same quarter last year to $2.538 billion although last year's results were impacted by tax reform.

By segment, Investment Banking revenue was 5 percent lower year-over-year at $2.04 billion, Institutional Client Services revenue rose 2 percent to $2.43 billion, Investing & Lending revenue fell 2 percent to $1.91 billion, Investment Management revenue rose 2 percent to $1.7 billion while provision for credit losses was $222 million compared to $290 million last year.

Why It's Important

Goldman Sachs CEO and Chairman David Solomon said the company delivered a top-and-bottom line beat for the full fiscal year despite a "challenging backdrop" for its market-making businesses in the second half of the year. Nevertheless, the company ended the year with the strongest return on equity since 2009 at 13.3 percent.

Solomon also said he's confident Goldman Sachs is well positioned to continue diversifying its revenue mix and deliver strong returns for investors in the years ahead.

Shares traded up 2.8 percent to $185 at time of publication.

Related Links:

Wells Fargo Reports Mixed Q4 Results

JPMorgan Q4 Earnings Print Misses Expectations


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